IMPACT OF HEALTHCARE REFORM ON STARK LAW AND ANTI-KICKBACK STATUTE

The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (Healthcare Reform Law) contains over 32 sections related to healthcare fraud and abuse and makes significant changes to existing civil, criminal and administrative anti-fraud statutes.

In summary, Healthcare Reform Law contains provisions that could greatly increase potential legal exposure for health care providers. In order to comply with Healthcare Reform Law, health care providers will need to make alterations to business arrangements, commercial transactions and compliance policies.

In order to address the impact on key program integrity and law enforcement agencies, Healthcare Reform Law provides $100 million to the Health Insurance Portability and Accountability Act Fraud and Abuse Control Program and Medicare Integrity Program during 2011-2012 fiscal year and an additional $250 million for fiscal years 2011-2016, for a total of $350 million.

AMENDMENTS TO ANTI-KICKBACK STATUTE

The Act's fraud and abuse amendments that may have the greatest impact on the health care industry are the amendment to the federal anti-kickback statute (AKS). These amendments:

• Relax the specific intent requirement to provide that an AKS violation may be established without showing that an individual knew of the AKS prohibition and intended to violate the law. This could create significant criminal and civil fraud exposure for arrangements where there is no intent to violate the AKS.
• Amend the definition of "remuneration" under the AKS to exclude from the definition any remuneration that promotes access to care and poses a low risk of harm to patients and federal healthcare programs. Activities will have to be closely scrutinized in order to determine if they fall under this exception.

NEW STARK LAW DISCLOSURE PROTOCOL

The Act requires the establishment of a Medicare Self-Referral Disclosure Protocol through which healthcare providers and suppliers may disclose actual and potential violations of the Stark Law which may be "technical" or non-fraud violations. The Act provides HHS with the discretion to compromise any amount due and owing for Stark law violations and forgo requiring a provider to repay the full amounts collected as the result of billing for services in connection with a prohibited referral. Among the factors HHS is permitted in taking into account in determining the amount owed in connection with a violation are: (i) the nature and extent of the improper or illegal practice; (ii) the timeliness of a self-disclosure; and (iii) corporation in providing additional information related to the disclosure.